‘I Say No’: Meet Masayoshi Son’s Financial Guru at SoftBank

Minutes after conducting a job interview for SoftBank’s chief financial officer in the summer of 2000, founder Masayoshi Son made a quick and characteristic decision: “I like the look of his eyes. Let’s hire him.

He had chosen to hire Yoshimitsu Goto, his fiercely loyal finance guru who is now at the center of SoftBank’s grueling battle against the global tech rout that plunged the conglomerate into a $23 billion loss.

In the past 18 months, Son has lost three of his top lieutenants and potential SoftBank heirs, including chief operating officer Marcelo Claure and chief strategy officer Katsunori Sago. Rajeev Misra, head of SoftBank’s $100 billion Vision fund and architect of the group’s complex financial engineering, has also stepped back to create his own fund.

Although not a candidate to take over Son’s investment empire, Goto is an exception to this revolving door of executives. He has become essential as a link between the highly indebted group and the largest global banks. SoftBank’s planned U.S. listing of British chipmaker Arm is just one of its challenges, with Son announcing this week that he plans to enter into talks with Samsung over the company.

The future of the Vision Fund has come under scrutiny following its dismal performance and a historic sale of its stake in Alibaba. But Goto insisted in an interview with the Financial Times that Son was likely to stay the course even if the fund goes into “defensive mode” to cut costs.

“I will not be surprised [if Son changed his mind] but I don’t think that’s likely. The investment company is the ultimate style of this business,” he said. But he added: “The basis of Mr Son’s thinking is that change is the best growth strategy to avoid risk.”

Goto, 59, outspoken, is far from your ordinary financial manager. His public duty is to persuade investors to abandon what he describes as the misleading image of the deal-driven, debt-ridden group as “fascinating but reckless”.

People close to SoftBank said a crucial part of Goto’s job was to convert Son’s ideas into understandable arguments for his lenders. When even his finance team can’t find a way to bring the founder’s vision to fruition, Goto is one of the few who can say no to Son.

“When an executive in charge of corporate finance and treasury says no, that’s the end of the story, so I know the weight of my words when I say no,” Goto said in an interview at HQ. company social in Tokyo.

His rule of thumb, however, is to exhaust all options by being creative. “I tell my team not to look for reasons why they can’t do it, but to think of ways to do it if they should try it. When it’s really impossible, there’s no answer and that’s where I say don’t do it. Mr. Son is rational so he understands right away.

The only line he doesn’t cross is to do anything that will harm what he calls a “relationship of absolute trust” that SoftBank has built with its biggest bank lender Mizuho.

The Exodus of SoftBank Executives

December 2020

Gary Ginsberg, Global Head of Communications

March 2021

Katsunori Sago, Chief Strategy Officer

January 2022

Marcelo Claure, Deputy CEO

April 2022

Akshay Naheta, ran hedge fund SB Northstar

August 2022

Rajeev Misra, still the head of the first Vision Fund, but has resigned from other positions at SoftBank

“It takes a long time to build a relationship of trust, but when it breaks down, it happens in the blink of an eye. I have never broken my promise with the banks in the past 20 years,” he said.

Japan’s third-largest bank is SoftBank’s biggest lender and the most exposed to its fortunes, having financed Son’s biggest deals involving US wireless operator Sprint and British chip designer Arm.

“The current relationship between Mizuho and SoftBank Group would have been unthinkable without Mr. Goto. That’s how important it is,” said Koji Fujiwara, Senior Advisor at Mizuho Financial Group and former Managing Director of Mizuho Bank.

The relationship has been tested in recent years after the implosion of high-profile bets made by the Vision Fund, including WeWork and the collapse of Greensill Capital, raised serious governance issues.

When SoftBank bailed out WeWork in 2019 to avoid a cash crisis, Mizuho issued a stern warning to Son and Goto that there would be no further bailouts.

As the performance of Oyo, a SoftBank-backed Indian hotel chain, lagged in 2020, Goto immediately hosted dinners between Mizuho executives and Ritesh Agarwal, Oyo’s founder, to address their concerns.

“We have raised concerns many times, but each time Mr. Goto has given us a quick and precise response,” Fujiwara added.

As a former banker at Mizuho Trust & Banking, Goto has a clear understanding of what lenders want from the company. He joined SoftBank in 2000, at the request of his mentor Kazuhiko Kasai, another former banker who served as Son’s chief financial officer and right-hand man until his death in late 2013.

Eventually, he would become chief financial officer and head of Son’s baseball team, while overseeing SoftBank’s evolution into Japan’s third-largest mobile operator and the world’s largest technology investor.

Kiyoshi Miyake, the former vice chairman of Mizuho Bank who is now chairman of property developer Chuo-Nittochi Group, said Goto brings a sense of stability to a dynamic but chaotic group.

“Ideas flow like water for Mr. Son, and it was Mr. Goto who said which can be done and which can’t be done,” he said, having known Goto since 2008 at the both as a customer and a drinking companion.

Investors are still struggling to get a full picture of SoftBank’s sprawling liabilities, partly because of Son’s debt-fueled deals, but also because of the complex financial instruments used by Misra.

Goto unsuccessfully attempted to simplify layers and layers of SoftBank’s debt, pledging to keep the company’s loan-to-value ratio below the 25% threshold.

The metric showing its net debt relative to the value of its assets stood at 14.5% at the end of June, down from 21.6% at the end of last year. SoftBank has net debt of 3.1 trillion yen ($22 billion), but the entire group has interest-bearing debt of 17.9 billion yen.

Many investors like Goto for his energetic style, but one longtime shareholder wondered how long the group could continue to look to sweeping asset sales such as the sale of Alibaba to bolster its balance sheet every time. that it faces a downturn.

“It’s impressive to see how Mr. Goto handles each of Mr. Son’s impossible tasks, but I fear the business is reaching a limit,” the Hong Kong-based investor said.

But regardless of the company’s future, very few expect Goto to join the string of recent departures. “I think Mr. Son has absolute confidence in Mr. Goto that he will not leave under any circumstances,” Fujiwara said.

Goto, meanwhile, says he’ll stay as long as Son needs him: “I always tell him to replace me without any hesitation if he thinks there’s a better person for my role.”

Additional reporting by Antoni Slodkowski in Tokyo

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